Q2 2014 Austin Office Market Update

downtown skylineJones Lang LaSalle’s Q2 2014 Austin Office Market Report shows Austin’s continued tightening of the Office Market with the following highlights noted.

  • The Austin office market continues to tighten as the vacancy rate ends the quarter at 12.2 percent – 8% lower than Q2 2012.
  • Total net absorption equaled 188,00 square feet, down 41% from Q2 2013.
  • Leasing activity was below average due at least in part to the dwindling availability of quality lease space.
  • 1.7 million square feet have been leased year to date.
  • Popularity in the Central Business District (CBD) has dropped Class A and B vacancy to 8.5% with Class B falling to 6%.
  • Average asking rate in the CBD was $40.67 per square foot, +$1.38 per square foot more expensive than Q2 2013.
  • CBD new construction is set to deliver over 920,000 SF this year with 74% pre-leased.
  • New Tenant Leases include Dropbox with 60,000 SF leased in the CBD, Google with 50,000 SF in Central Austin, Whole Foods with 41,000 SF in the CBD and MapMyFitness with 35,000 SF also in the CBD.
  • Sales transactions include 11305 Four Points Drive in the Far Northwest with 192,000 SF sold, 5301 Southwest Parkway with 164,700 SF in Southwest Austin, the Lionstone Portfolio with 178,000 SF in Southwest Austin and 68,000 SF purchased in Central Austin at 314 E Highland Mall Blvd.

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